Coinbase to launch futures contracts based on the XRP token

What’s new? The derivatives trading division of Coinbase, the leading US centralized crypto exchange (CEX), has filed with the US Commodity Futures Trading Commission (CFTC) to launch new products based on the XRP token from fintech company Ripple. Coinbase Derivatives plans to launch standard futures contracts for 10 000 XRP and nano contracts for 500 XRP.

Source: X.com

What else is known? Both contracts are expected to start trading on April 21. They will be settled based on the MarketVector Coinbase XRP Index. The company said it will offer “a regulated and capital-efficient way to gain exposure to one of the most liquid digital assets.”

XRP ranks fourth in the overall cryptocurrency market capitalization ranking at $123,9 billion and is trading at $2,11, having added 5,6% overnight. Over the past six months, the asset has increased in value by 297%.

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The announcement of the launch of futures contracts followed changes in the approach to XRP regulation. Thus, in March, Ripple CEO Brad Garlinghouse said that the US Securities and Exchange Commission (SEC) would not appeal the case, the subject of which was the status of the asset.

Back in 2020, the regulator accused the company of conducting unregistered sales of securities in the form of XRP tokens, but the court found violations only in institutional sales.

Thus, the July 2023 decision found that programmatic sales of XRP, through exchanges such as Coinbase, did not violate securities laws because they were conducted through blind trading. Because the SEC decided not to appeal, the decision now stands, reinforcing the view that XRP is not a security.

The filings mark Coinbase Derivatives’ latest move to expand its lineup of regulated crypto derivatives for institutional and retail clients. The XRP futures add to an existing suite that includes contracts on bitcoin, Ethereum, SOL, DOGE, and ADA. The exchange also offers contracts for gold, silver, oil, and gas.

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Coinbase Derivative was launched in 2022 after Coinbase bought the CFTC-regulated futures exchange FairX.